The Madoff Victim Fund controlled by the U.S. Justice Department said it will distribute $2.4 billion in forfeitures from the Jeffry Picower estate “as fast as possible” once all eligible recipients are known.
The statement came in answer to calls for an update from victims of the fraud, according to the Madoff Victim Fund’s four-month-old website. The money is part of a $7.2 billion settlement by the widow of one of Bernard Madoff’s largest individual investors of a lawsuit accusing Picower of having known of the fraud, which robbed customers of about $17 billion in principal.
A federal judge approved the settlement in March 2012 and the trustee liquidating Madoff’s bankrupt brokerage distributed his $5 billion share of the Picower money a year ago, when a former Madoff customer lost her legal bid to challenge her exclusion from the payout.
Any perceived delay by the government in distributing its share of the money relates to definitions of who is eligible, according to the Justice Department’s fund. While the trustee for the Madoff firm’s estate uses bankruptcy law to decide which customers should be compensated, the fund must screen the conman’s investors for victims, according to its website.
“The legal definition of ‘victim’ is different,” the fund said. “The MVF must analyze carefully the circumstances under which eligible customers are also ‘victims,’ as well as whether there are ‘victims’ who were not recognized as ‘customers’ in the bankruptcy proceedings.”
While the fund said it can’t yet set a date for the payout, “the process is moving forward toward necessary decisions in the relatively near term.” Madoff customers can look for updates on the site “approximately every 45 days, or as the MVF has news to report.”
Picower died of a heart attack in the pool of his Palm Beach, Florida, home. Madoff, after confessing to running the largest Ponzi scheme in history, is serving a 150-year prison term.
The Madoff brokerage liquidation case is Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, 08-bk-01789, U.S. Bankruptcy Court, Southern District of New York (Manhattan).